Electronically Recorded Tarrant County Texas

Official Public Records 2008 Dec 01 02:01 PM

D208440762

Fee: $ 24.00 Submitter: SIMPLIFILE 3 Pages

NOTICE OF CONFDENT@ttfnYlRi&HTS: A NATURAL PERSON MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION BEFORE IT IS FILED IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

XTO REV PROD 88 (7-69) PA© UP (04/17«7)B

OIL, GAS AND MINERAL LEASE

THIS AGREEMENT made this {5 dav of QcToiref , 2008, between John A. Ring and Martha N. Fling, husband and

wife, Lessor (whether one or more), whose address is: 7621 Gteneagles Way, Fort Worth, Texas 76179 and XTO Energy Inc., whose address is: 810 Houston St, Fort Worth, Texas 76102, Lessee, WITNESSETH:

disposal of salt water, construct roads and bridges, dig canals, build tanks, power stations, telephone lines, employee houses and other structures on said tend, necessary or useful in Lessee's operations in exploring, dnlfing for, producing, treating, storing and transporting minerals produced from the land covered hereby or any other land adjacent thereto. The land covered herebVTierein called "slid land " islocated in the County of Tarrant, State of Texas, and is descnbed as follows: '

R^^i^'J^Pi}!?^ ?Jh£.Gw^s J&lL8un£*' Abstract Number 1986 and the Dempsey C. Pace Survey, Abstract Number 1246 and being Lot 14 fclock 1, Gteneagles Addition, Phase 2. an Addition to the City of Fort Worth, Tarrant CounW, Texas, —S^ES ^it* J5i F00^ A, Slide 2466, Plat Records, Tarrant County, Texas and being those same larwis more

particularly described in a Warranty Deed with Vendor's Lien dated January 9, 1997 from Rodgers Custom Homes, Ino. to John A. li2L?™2?£* Mfrtha N Fling recorded thereof in Volume 12640, Page 1402, Deed Records. Tarrant County, Texas, and amendments thereof including streets, easements and alleyways adjacent thereto, and any riparian rights.

SEE ATTACHED ADDENDUM FOR ADDITIONAL PROVISIONS

This

-i — ,r®??A"-> .™ ™.( wit am «wi«« wi oani lain**, nvvvwei, Losses sn

or part thereof, with other lands to comprise an oil and/or gas development unit.

....=, is a non -developmental Oil & Gas Lease, whereby Lessee, its successors or assigns, shall not conduct any operations, as defined herein, on the surface of said lands. However, Lessee shall have the right to pool or unitize said lands, or part thereof, with other lands to comprise an oil and/or gas development unit.

This tease also covers and includes in addition to that above described, all land, if any, contiguous or adjacent to or adjoining the land above descnbed and (a) owned or claimed by Lessor by Imitation, prescription, possession, reversion, after-acquired title or unrecorded instrument or (b) as to which Lessor has a preference right of acquisition. Lessor agrees to execute any su>plementaJ instrument requested by Lessee for a 2X<?Ti£*e or accurate description of said land. For the purpose of determining the amount of any bonus or other payment hereunder, said land shall be deemed to contain 0.523 acres, whether actually containing more or less, and the above recital of acreage in any tract shall be deemed to be the true acreage thereof. Lessor accepts the bonus as lump sum consideration for this lease and all rights and options hereunder.

2. Unless sooner terminated or longer kept in force under other provisions hereof, this lease shall remain in force for a term of — - — &arl 106 dateterepf. hereinafter called "primary term," and as long thereafter as operations, as hereinafter defined, are conducted upon said land with no cessation for more than nrtety (90) consecutive days.

3. As realty .Lessee covenants and agrees: (a) To dehverto the credit of Lessor, in the pipe line to which Lessee may connect its wells, the equal 1/4 part of an oil produced and saved toy Lessee from said land, or from time to time, at the option of Lessee, to pay Lessor the average posted market price of such 1/4 part of such oil at the wells as of the day it is run to the pipe line or storage tanks, Lessor's interest, in either case, to bear w of the cost of treating oil to render it marketable pipe line oil; (b) To pay Lessor on gas and casinghead gas produced from said land (1 ) when sold by Lessee. 1/4 of the amount realized by Lessee, computed at the mouth of the well, or (2) when usedby Lessee off said land or in the manufecture of gasoline or other products, the market value, at the mouth of the weB, of 1/4 of such gas and casinghead gas; (c) To pay Lessor on 3,1 otS™lnefate ™«l and marketed or utilized by Lessee from said land, one-tenth eiffier in kind or value at the well or mine at Lessee's election, except that on sulphur mined and marketed the royalty shall be one dollar ($1 .00) per long ton. If, at the expiration of the primary term or at any time or times thereafter, there is any well on said land or on lands with which said (anchor any portion thereof has been pooled, capable of producing oil or gas. and all such wells are shut-in, this tease shall, nevertheless, continue in force as though operations were being conducted on said land for so long as said wells are shut-in, and thereafter this lease may be continued in force as if no shut-in had occurred Lessee covenants and) agrees to use reasonable diligence to produce, utilize, or market the minerals capable of being produced from said wels., but in the exercise of such diligence, Lessee shaH not be obligated to install or furnish facilities other than well facilities and ordinary lease facilities of flow lines, separator, and (ease tank, and shall not be required to settle labor trouble or to market gas upon terms unacceptable to Lessee, ft, at any time or tmesafter the expiration of the primary term, all such wells are shut-in for a period of ninety consecutive days, and during such time there are no operations on said and, then at or before the expiration of said ninety day period, Lessee shall pay or tender, by check or draft of Lessee, as royalty, a sum equal to one dollar ($1 .00) for each acre of land then covered hereby. Lessee shall make like payments or tenders at or before the end of each anniversary of the expiration of said ninety day period if upon such anniversary this lease is being continued in force solely by reason of the provisions of this paragraph. Each such payment or tender shall be made to the parties who at the time of payment would be entitled to receive the royalties which would be paid under this lease if the wells were producing, and may be deposited in such bank as directed by Lessor or its successors, which shall continue as the deposrtones, regardless of changes in the ownership of shut-in royalty. If at any time that Lessee pays or tenders shuhn royalty, two or more parties are, or claim to be, entitled to receive same. Lessee may, in lieu of any other method of payment herein provided, pay or tender such shut-in royalty, in the manner above specified, either jointly to such parties or separately to each in awrdance with their respective ownerships thereof, as Lessee may elect. Any payment hereunder may be made by check or draft of Lessee deposited in the mail or deivered to the party entitled to receive payment or to a depository bank provided for above on or before the last date for payment Nomina herein shall impair Lessee's right to release as provided in paragraph 5 hereof. In the event of assignment of this lease in whole or m part, liability for payment hereunder shall rest exclusively on the then owner or owners of this lease, severally as to acreage owned by each.

4. Lessee is hereby granted the right at its option, to pool or unitize any land covered by this lease with any other land covered by this lease, anovorwrth any other land, lease, or leases, as to any or all minerals or horizons, so as to establish units containing not more than 80 surface acres plus 10% acreage tolerance; provided, however, units may be estabished as to any one or more horizons, or existing units may be enlarged as to any one or more horizons so as to contain not more than 640 surface acres plus 10% acreage tolerance, if limited to one or more of the following: (1) gas, other than casinghead gas, (2) liquid hydrocarbons (condensate) which are not liquids in the subsurface reservoir, (3) minerals produces from wells classified as gas wells by the conservation agency having jurisdiction. If larger units than any of those herein permitted, either at the time established, or after enlargement, are permitted or required under any governmental rule or order, for the drilling or operation of a well at a regular tocatjon, or for obtaining maximum allowable from any well to be drilled, drilling, or already drilled, any such unit may be established or enlarged to conform to the size permitted or requred by such governmental order or rule. Lessee shall exercise said option as to each desired unit byexecuhng an instrument identifying such unit and filing it for record in the public office in which this lease is recorded. Such unit shall become effective as of the date provided for in said instrument or instruments but if sad instrument or instruments make no such provision, then such unit Shan become effective on the date such instrument or instruments are so filed of record. Each of said options may be exercised by Lessee at any time and from time to time while this lease is in force, and whether before or after operations or production has been established either on said tend, or on the portion of said land included in the unit or on other land unitized therewith. A unit established hereunder shall be valid and effective for an purposes of this lease even though there may be mineral, royalty, or leasehold interests in lands within the unit which are not effectively pooled or unitized. Any operations conducted on any part of such unitized land shall be considered, for all purposes, except the payment of royalty, operations conducted upon said land under this lease. There shall be allocated to the land covered by this lease within each such unit (or to each separate tract wrthin the unit if this lease covers separate tracts within the unit) that proportion of the total production of unitized minerals from the unit after deducting any used in lease or unit operations, which the number of surface acres in such land (or in each such separate tract) covered by this tease wrthin the unit bears to the total number of surface acres in the unit and the production so allocated shall be considered for ajlpunposes, including payment or delivery of royalty, overriding royalty and any other payments out of production, to be the entire production of unitized minerals from the land to which allocated in the same manner as though produced therefrom under the terms of this lease, me owner of the reversionary estate of any term royalty or mineral estate agrees that the accrual of royalties pursuant to this paragraph or of shuhn loyalties from a well on the unit shall satisfy any Imitation of term requiring production of oi or gas. The ftxmatjon of any unFhereunder which includes land not covered by this lease shaH not have the effect of exchanging or transferring any interest under tfiis tease (including, without Imitation, any shut-in royalty which may become payable under this tease) between parties owning interests in land covered by this tease and parties owning interests in land not covered by this lease. Neither shall it impair the right of Lessee to release as provided in paragraph 5 hereof except that Lessee may not so release as to lands within a unit while there are operations thereon for unitized minerals unless af pooled leases are released as to lands wrthin the unit At any time while this lease is in force Lessee may dissolve any unit established hereunder by filing for record in the public office where this lease is recorded a declaration to that effect if at that time there is no unitized minerals being produced from such unit Any unit formed may be amended, re-formed, reduced or enlarged by Lessee at its election at any time and from time to time after the

original forming thereof by filing an appropriate instrument of record in the public office in which the pooled acreage is located. Subject to the

S revisions of this paragraph 4, a unit once established hereunder shall remain in force so long as any lease subject thereto shall remain in force. If us lease now or hereafter covers separate tracts, no pooling or unitization of royalty interests as between any such separate tracts is intended or shall be implied or result merely from the inclusion of such separate tracts within this lease but Lessee shall nevertheless have the right to pool or unitize as provided in this paragraph 4 with consequent allocation of production as herein provided. As used in this paragraph 4, the words "separate tract" mean any tract with royalty ownership differing, now or hereafter, either as to parties or amounts, from that asto any other part of the leased premises.

5. Lessee may at any time and from time to time execute and deliver to Lessor or file for record a release or releases of this lease as to any part or all of said land or of any mineral or horizon thereunder, and thereby be relieved of all obligations, as to the released acreage or interest

6. Whenever used in this lease the word "operations" shal mean operations for and/or any of the following: preparing the drillsite location and/or access road, dnling, testing, completing, reworking, recompleting, deepening, sidetracking, plugging back or repairing of a wen in search tororn an endeavor to obtain production of oiC gas, sulphur or other minerals, excavating a mine, production of oil, gas, sulphur or other mineral, whether or not in paying quantities.

7. Lessee shal have the use, free from royalty, of water, other than from Lessor's water wells, and of oil and gas produced from said land in all operations hereunder. Lessee shall have the nght at any time to remove all machinery and fixtures placed on said land, including the right to draw and remove casing. No well shaN be drilled nearer than 200 feet to the house or bam now on said land without the consent of the Lessor. Lessee shall pay for damages caused by its operations to growing crops and timber on said land.

8. The rights and estate of any party hereto may be assigned from time to time in whole or in part and as to any mineral or horizon. All of the covenants, obligations, and considerations of this lease shall extend to and be binding upon the parties hereto, their heirs, successors, assigns, and successive assigns. No change or division in the ownership of said land, royalties, or other moneys, or any part thereof, howsoever effected, shall increase the obligations or diminish the rights of Lessee, including, but not limited to, the location and drilling of wells and the measurement of production. Notwithstanding any other actual or constructive knowledge or notice thereof of or to Lessee, its successors or assigns, no change or division in the ownership of said land or of the royalties, or other moneys, or the right to receive the same, howsoever effected, shall be binding upon the then record owner of this lease until sixty (60) days after there has been furnished to such record owner at his or its principal place of business by Lessor or Lessor's heirs, successors, or assigns, notice of such change or division, supported by either originals or duly certified copies of the instruments which have been properly filed for record and which evidence such change or division, and of such court records and proceedings, transcripts, or other documents as shall be necessary in the opinion of such record owner to establish the validity of such change or division. If any such change m ownership occurs by reason of the death of the owner, Lessee may, nevertheless pay or tender such royalties, or other moneys, or part thereof, to the credit of the decedent in a depository bank provided for above.

9. In the event Lessor considers that Lessee has not complied with al its obligations hereunder, both express and implied, Lessor shal notify Lessee in writing, setting out specifically in what respects Lessee has breached this contract. Lessee shall then have sixty (60) days after receipt of said notice within which to meet or commence to meet aH or any part of the breaches alleged by Lessor. The service of said notice shall be precedent to the bnngmg of any action by Lessor on said lease for any cause, and no such action shall be brought until the lapse of sixty (60) days after service of such notice on Lessee. Neither the service of said notice nor the doing of any acts by Lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that Lessee has failed to perform all its obligations hereunder. If this lease is canceled for any cause, it shaH nevertheless remain in force and effect as to (1 ) sufficient acreage around each well as to which there are operations to constitute a doling or maximum alowabte unit under applicable governmental regulations, (but in no event less that forty acres), such acreage to be designated by Lessee as nearly as practicable in the form of a square centered at the well, or in such shape as then existing spacing rules require; and (2) any part of said land included in a pooled unit on which there are operations. Lessee shall also have such easements on said land as are necessary to operations on the acreage so retained and shall not be required to move or remove any existing surface facilities necessary or convenient for current operations.

10. Lessor hereby warrants and agrees to defend title to said land against the claims of all persons whomsoever. Lessor's rights and interests hereunder shall be charged primarily with any mortgages, taxes or other liens, or interest and other charges on said land, but Lessor agrees that Lessee shaH have the right at any time to pay or reduce same for Lessor, either before or after maturity, and be subrogated to the rights of the holder thereof and to deduct amounts so paid from royalties or other payments payable or which may become payable to Lessor and/or assigns under this lease. If this lease covers a less interest in the oil, gas, sdphur, or other minerals in all or any part of said land than the entire and undivided fee simple estate (whether Lessor's interest is herein specified or not), or no interest therein, then the royalties and other moneys aocruing from any part as to which this lease covers less than such ful interest, shall be paid only in the proportion which the interest theren, if any, covered by this lease, bears to the whole and undivided fee simple estate therein. All royalty interest covered by this lease (whether or not owned by Lessor) shall be paid out of the royalty herein provided. This lease shall be binding upon each party who executes it without regard to whether it is executed by all those named herein as Lessor.

1 1 . if, while this lease is in force, at, or after the expiration of the primary term hereof, it is not being continued in force by reason of the shut-in well provisions of paragraph 3 hereof, and Lessee is not conducting operations on said land by reason of (1) any law, order, rule or regulation, (whether or not subsequently determined to be invalid) or (2) any other cause, whether similar or dissimilar, (except financial) beyond the reasonable control of Lessee, the primary term hereof shall be extended until the first anniversary date hereof occurring ninety (90) or more days following the removal of such delaying cause, and this lease may be extended thereafter by operations as if such delay had not occurred.

12 Lessor agrees that this tease covers and includes any and all of Lessor's rights in and to any existing weH(s) and/or wellbore(s) on said land, other than existing water wefls, and for al purposes of this lease the re-entry and use by Lessee of any existing well and/or wellbore shall be deemed the same as the drilling of a new well.

13. Notwithstanding anything to the contrary contained in this lease, at the option of Lessee, which may be exercised by Lessee giving notice to Lessor, a wen which has been drilled and Lessee intends to frac shall be deemed a well capable of producing in paying quantities and the date such well is shut-in shall be when the drilling operations are completed.

14. As a result of land development in the vicinity of said land, governmental rules or ordinances regarding well sites, and/or surface restrictions as may be set forth in this lease and/or other leases in the vicinity, surface locations for well sites in the vicinity may be limited and Lessee may encounter difficulty securing surface location(s) for drilling, reworking or other operations. Therefore, since drilling, reworking or other operations are either restricted or not allowed on said land or other leases in the vicinity, it is agreed that any such operations conducted at a surface location off of said land or off of lands with which said land are pooled in accordance with this lease, provided that such operations are associated with a directional well for the purpose of drilling, reworking, producing or other operations under said land or lands pooled therewith, shall for purposes of this lease be deemed operations conducted on said land. Nothing contained in this paragraph is intended to modify any surface restrictions or pooling provisions or restrictions contained in this lease, except as expressly stated.

IN WITNESS WHEREOF, this instrument is executed on the date first above written.

STATE OF

Texas

}

} ss.

(ACKNOWLEDGMENT FOR INDIVIDUAL) the $~H\ day of Octohet^ 2008 by John A. Fling and Martha N. Fling

COUNTY OF Tarrant } This instrument was acknowledged before me on husband and wife.

ADDENDUM

ATTACHED TO AND MADE A PART OF THAT CERTAIN OIL, GAS AND MINERAL LEASE DATED O&fobcif /<f> . 2008 BETWEEN JOHN A. FLING AND MARTHA N. FUNG AS LESSOR, AND XTO ENERGY INC., AS LESSEE, COVERING 0.523 ACRES OF LAND, MORE OR LESS, OUT OF THE DEMPSEY C. PACE SURVEY, ABSTRACT NUMBER 1245, IN TARRANT COUNTY, TEXAS.

THE PROVISIONS OF ADDENDUM SUPERSEDE COMPLETELY ANY PROVISIONS TO THE CONTRARY CONTAINED IN THE LEASE TO WHICH THIS ADDENDUM IS ATTACHED.

15. Minerals Covered. Notwithstanding any other provision hereof, this lease covers only oil and gas. The term "oil and gas" means oil, gas, and other liquid and gaseous hydrocarbons and their constituent elements produced through a well bore.

16. Gas Royalty. Lessor's royalty shall be calculated free and clear of costs and expenses for exploration, drilling, development and production, including, but not limited to, dehydration, storage, compression, separation by mechanical means and product stabilization, incurred prior to the oil, gas and other mineral production leaving the leased premises or prior to delivery into a pipeline or gathering system, whichever occurs first; provided, however, (a) Lessee shall have free use of produced oil and gas for operations conducted on the leased premises or lands pooled therewith, and the royalties on oil and gas herein provided shall be computed after deducting any so used, and (b) Lessor's royalty shall bear its proportionate share of all ad valorem taxes and production, severance and other taxes and the actual, reasonable costs (including compression and related fuel charges) paid to or deducted by an unaffiliated third party to transport, compress, stabilize, process or treat the oil, gas and other mineral production off the leased premises in order to make the oil, gas and other mineral production saleable, increase its value or in order to get the oil, gas and other mineral production to a market.

17. Shut-in Royalty. If at the end of the primary term or any time thereafter one or more wells on the leased premises or lands pooled therewith are capable of producing oil or gas or other substances covered hereby in paying quantities, but such well or wells are either shut-in or production therefrom is not being sold by Lessee, such well or wells shall nevertheless be deemed to be producing in paying quantities for the purpose of maintaining this Lease. A well that has been drilled but not fraced shall be deemed capable of producing in paying quantities. If for a period of ninety (90) consecutive days such well or wells are shut-in or production therefrom is not being sold by Lessee, then Lessee shall pay shut-in royalty of twenty five dollars ($25.00) per acre then covered by this Lease on or before the end of said 90 ~ day period and thereafter on or before each anniversary of the end of said 90 -day period while the well or wells are shut-in or production therefrom is not being sold by Lessee; provided, however, that if this Lease is otherwise being maintained by operations, or if production is being sold by Lessee from another well or wells on the leased premises or lands pooled therewith, no shut-in royalty shall be due until the end of the 90-day period next following cessation of such operations or production. Notwithstanding anything to the contrary herein, it is expressly understood and agreed that after the expiration of the primary term, Lessee shall not have the right to continue this Lease in force by payment of shut-in royalty for more than one single period of up to two (2) consecutive years.

18. No Surface Operations. It is hereby agreed and understood that there shall be no drilling activities on the surface of the leased premises without the prior written permission from the surface owner of the applicable portion of the leased premises. Notwithstanding the foregoing, this waiver of surface shall not be construed as a waiver of the rights of Lessee to utilize the subsurface of the leased premises under this lease, and Lessee shall have the right to exploit, explore for, develop and produce oil, gas and other covered minerals under this lease from wells from surface locations off the leased premises, including, but not limited to, directional or horizontal drilling activity which comes under the surface of the leased premises. This drilling surface waiver does not apply to any surface rights associated with instruments other than this lease.

1 9. Vertical Pugh. Upon the expiration of the primary term of this Lease, upon the expiration of any extension or renewal of the primary term, or after cessation of operations as provided herein, whichever occurs last, this Lease shall terminate as to all rights lying below one hundred feet (1 00') below the stratigraphic equivalent of the deepest formation drilled.

20. No Warranties. Lessor makes no warranty of any kind with respect to title to the Land. By acceptance of this Lease, Lessee acknowledges that it has been given every opportunity to investigate and has conducted sufficient investigation to satisfy itself as to the title to the Land, and Lessee assumes all risk of title failures. All warranties that might arise by common law or by statute, including but not limited to Section 5.023 of the Texas Property Code (or its successors), are excluded. If Lessor owns an interest in the Land less than the entire fee simple estate, then the royalties (including shut-in royalties) payable hereunder will be reduced proportionately. All royalty interest covered by this lease (whether or not owned by Lessor) shall be paid out of the royalty herein provided. Lessor will use all its reasonable efforts to assist Lessee to subordinate any rights of a mortgage holder to perfect the Lessee's rights under this lease; provided, however, any necessary subordination shall be obtained by Lessee at Lessee's sole expense. In the event Lessee is unable to obtain a subordination agreement, Lessee, at its option, may discharge any tax, mortgage, or other lien or interest and other charges on the Land superior to this Lease, and in the event Lessee does so. Lessee will have the option of applying the royalties accruing to Lessor toward payment of same and Lessee shall be subrogated to the rights of the holder thereof.

Executed on the date first written above.

BY: Martha N. Ring